Christmas trade down at night time hospitality businesses as strikes and inflation bite

The flash poll of 206 NTIA members found that while New Year’s Eve performed better than expected with businesses trading 16% down on 2019, across the whole of December trade was down by 21% on pre-pandemic levels as a result of consumer cost pressures such as rising inflation and less disposable income as well as the train strikes.

Out of the respondents, 53.7% reported that they did not make enough profit to cover cash reserve requirements for the slower periods, with 21% of businesses reporting that they were only just making enough.

More than 50% of businesses said they only had enough cash reserves to survive for up to two months with 39% believing they will survive over four months, and 25% between one and two months.

Customers feeling the pinch

When asked about what they thought had impacted trade the most during the festive period, 46% of respondents attributed it to customers having less disposable income, 27% to cost inflation, 16% to industrial action and 6% to the poor weather.

“Following a flash poll of members, over 50% of businesses have not been able to build the necessary cash reserves required to survive early 2023, with over 50% of respondents suggesting that they only have enough to survive the next two months, as night time economy businesses see a 20% drop in trade across the Christmas period,” says NTIA CEO Michael Kill.

“With operating costs continuing to increase, Rent & VAT due in January and the media talking about the Government halving the current energy subsidy scheme we are faced with a challenging Q1 2023, with many trying to find a pathway through the uncertainty.”

“It is clear that inflationary pressures, both business and domestic, have caused the most damage, with Industrial action impacting cities and large towns reliant on consumer mobility at night.”

“This is one of the biggest challenges the industry has faced, for many a greater crisis than the pandemic, with many businesses being left on the edge trying to survive.”

“We will not accept that there will be casualties of this crisis, and urge the Government to be clear with its intentions on energy and the coming March budget before its too late.”

Businesses will be looking for Government assistance in the forthcoming March Budget, with a reduction in VAT cited by 85.9% of respondents as the best form of support that can be taken to help them survive.